Related articles:

Napolitano vetoes budget 'freeze'

Other articles by Howard Fischer:

Law on hours for adult stores hits a detour Clean-elections fund match must go, federal judge told Napolitano questions allocation of funds in some school districts Gov. seeks to bypass budget holdup Developer, his firms to pay $1M for ruining 5 miles of Santa Cruz Ruling will allow 'Choose Life' plate Judge asked to silence AHCCCS chief Douglas ex-mayor now governor's adviser Affirmative-action debate continues Internet OK for some public meetings, Goddard says

Finance and Accounting
Patient Financial Coordinator Health Care
Respicare
Sales Rep Sales and Marketing
sales Customer Service
LA Z BOY
CUSTOMER SERVICE REPRESENTATIVES Construction
ROR Construction
Residential Framing Carpenters General
El Rio
Switchboard Operator Trades/Construction
Sundt Construction
Small Business Owners

PHOENIX — Republican legislative leaders conceded for the first time Wednesday there is no way to balance the budget this year and next without borrowing hundreds of millions of dollars.

House Speaker Jim Weiers said GOP lawmakers balked last fall when Demo-cratic Gov. Janet Napolitano proposed borrowing money to build schools rather than paying cash. He said they saw no reason to incur debt, and pay interest, to deal with what was then a $600 million deficit.

But Weiers said the continued sharp slide of state tax revenues now puts the gap between income and spending higher than $1.2 billion this year, with possibly a $1.9 billion deficit for the coming fiscal year. He said there is just no way to make up that gap without borrowing.

Weiers said, though, the state still needs to cut $1 billion in spending during the current and coming budget years to balance the books.

The new GOP stance comes as a testy Napolitano lashed out Wednesday at Republican state Treasurer Dean Martin over his contention the state is spending money as fast as ever.

Martin, at a morning press conference, said his latest computations show the state will have spent all the money it will take in this fiscal year as early as April 22, more than two months before the budget year ends June 30.

What angered the governor was Martin's computation that the state is spending money as fast now as it did when Napolitano directed state agency chiefs in September to curb expenses. She said he doesn't know what he's talking about.

"He doesn't manage the state agencies, he doesn't see the accounts, he doesn't know what's being held in reserve," she said.

"He's making a lot of assumptions or presumptions that are simply inaccurate," Napolitano continued. "And the plain fact of the matter is the state agencies have been abiding by the budget management plans that I have been putting forth."

Martin acknowledged he does not know exactly where each dollar goes. But he said all the bills the state pays pass through his office, as does the state payroll.

"We're the bank," Martin said. "We see the dollars in and out."

And 8 1/2 months into the budget year, he said an average of about $29.3 million a day is going out — a pace he said has more or less stayed the same for months.

Napolitano bristled at that claim.

"He doesn't know the number," she said. "And he can't."

The governor also pointed out Martin scheduled his press conference for 9:30 a.m., a half-hour ahead of her normal weekly briefing "so you all would ask questions. You've asked questions. He's inaccurate."

Napolitano said she was not "underplaying the urgency" of the state's fiscal condition. And the governor said she and lawmakers are actively negotiating to plug the gap.

But Martin "adds nothing to the discussion," she said.

The governor and legislative leaders are scheduled to meet again today behind closed doors.

Weiers said there are some stopgap solutions, including raiding the nearly $700 million in the state's "rainy day" fund and taking cash from other special accounts. But the size of the fiscal hole means borrowing for school construction, essentially taking the expenditure off the books.

Richard Stavneak, staff director of the Joint Legislative Budget Committee, said revenues for November were 0.6 percent below the same period a year earlier. That accelerated to a 4.3 percent difference in December and a 16.1 percent drop for January.

He said preliminary figures suggest February collections will be 13.5 percent less than last year.

Martin said he already is seeking legal advice on his options if there is no budget deal when the money runs out. Even tapping the $700 million in the rainy day fund would cover state spending for only about 25 days.